The Default Consume Forecast by Period Method is Don't Limit, and the Consume Closest Forecast Demand to SO Line Ship-By Date option is selected.

You enter a sales order for 700 units to ship by 7/30/08.

The forecast that is closest to the sales order ship-by date (the 7/30 forecast) is consumed first and moved to the sales order demand quantity.

The 7/30 open forecast quantity of 200 is insufficient to meet the sales order demand; 500 units remain. The next 200 units are consumed from the next closest date. Because the 7/29 and 7/31 forecasts are equally close, the earlier forecast (7/29) is consumed first. Now 300 units remain.

The 7/31 forecast is now the closest. It consumes another 200 units, leaving 100 to be consumed by the next closest forecast (8/01). Because only part of that open forecast quantity is consumed, the 8/01 forecast is left with an open sales forecast quantity of 100.